channel checks: foodservice in london stores...selfridges selfridges offers even greater choice....

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DeborahWeinswig,ManagingDirector,FungGlobalRetail&Technologydeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

April6,2017

July14,2017

OurChannelChecksreportsfeatureobservationsfromourrecentstoretours.Inthisreport,welookatnewandinnovativefoodserviceofferingsinUKretail.

1) Foodserviceofferingscanincreasedwelltimein-storeandcanincreasespendingby18%onaverageintheUK,butupto38%inLondon.

2) UKconsumersaregrowingtheirspendingatrestaurantsandcafésmorethantheyaretheirspendingatretail.

3) Apparelretailersuseknownfoodservicebrandsin-storewhichcomplementtheirownimage.

4) Departmentstoresofferthewidestchoiceoffoodservice,withSelfridgesoffering16differenteat-inrestaurantsaswellasmultiplefoodstallsanddelicatessens.

5) Grocerysuperstoresareinnovatingwithwinebarsandsushibars.

Channel Checks: Foodservice in London Stores

Deborah Weinswig

Managing Director,

Fung Global Retail & Technology

deborahweinswig@fung1937.com

US: 917.655.6790

HK: 852.6119.1779

CN: 86.186.1420.3016

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DeborahWeinswig,ManagingDirector,FungGlobalRetail&Technologydeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

April6,2017

July14,2017

IntroductionHavingaqualityproductisnolongerenoughforretailerstocreatecustomerloyaltyandbrandstrength.Instead,brick-and-mortarstoresarefocusingonthequalityoftheentirein-storeexperience.

Sofar,ourChannelChecksreportshaveanalyzedthewaysretailersarediversifyingtheirstoreexperience—fromdigitalizingthein-storeexperiencetoaddingnewproductcategories.ThisreportcoversourstoretoursatLondonretailersthathaveexpandedtheirbrandpropositionintoafoodserviceandbeveragesoffering.Webeginbyprovidingsomecontextonfoodserviceinretail.

FoodserviceIncreasesShopperSpendShoppingmallshavebeenvisiblytransformingtoeconompassnotonlyretail,butalsoentertainment,foodandeveneducation.ThistrendisalsobeingmirroredinstandalonestoresacrosstheUK,asretailersseektoincreasedwelltimesandultimatelytheamountcustomersspend.

• SeeourreportTheMallisNotDead:Part1formoreonthistopic.

Foodserviceofferingsinretailcanrangefromconvenienceofferingstoexperimentalrestaurants.Somestoreswevisitedofferabasiccafé,whileothershadaseasonalrooftopterrace.

Foodservicecanplayaneffectiveroleinencouragingshoppersto“staylonger,spendlonger”:Britswhoeatduringashoppingvisitdwellonaverage27minuteslonger,andspend18%morepervisit,accordingtopropertymanagementfirmJLL.InLondon—wheremanyshoppersaremoreaffluentandthechoiceofcasualdiningiscountless—storesthatofferfoodservicecanseeshoppersdwellonly10%longer,butspend38%moreonaverage,accordingtoIntelligentBusinessSystems.

Moreover,foodserviceofferingsallowretailerstotapahigher-growthmarket.UKconsumersincreasedtheirspendingatrestaurantsandcafésby3.9%in2016,accordingtotheOfficeforNationalStatistics.Thiscomparedtoa1.8%riseinfoodretailers’salesanda3.3%increaseintotalretailsales.

High-growthfoodserviceoperatorshaveseenasurgeinprivateequityinvestmentduetotheirrelativeimmunityfromthegrowthofonlineshoppingandtheriseindiningoutaspartofashoppingtrip,accordingtoAccentureStrategy’sJavelinGroup.

ChannelChecks:FoodserviceinUKRetailTheFungGlobalRetail&Technologyteamvisitedapparelretailers,departmentstoresandgrocerystores,whichhaveafoodserviceoffering.AllthestoreswereinLondon;mostwerelocatedaroundtheOxfordStreetarea,exceptforWaitrosewhichwasinKing’sCross.Wevisitedthemallonaweekday.

Londonersspend38%morewhenstoreshaveafoodserviceoffering.

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DeborahWeinswig,ManagingDirector,FungGlobalRetail&Technologydeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

April6,2017

July14,2017

ApparelRetailers

PrimarkPrimarklaunchedacaféinitsOxfordStreet/TottenhamCourtRoadstoreinlate2016.ThestorefeaturestheInsomniaCoffeeCompany,anIrishchain,whichopeneditsfirstPrimarkshopinBrentinOctober2016.Thecaféofferscoffee,pastriesandsandwiches,aswellashotmealswithseparatebreakfastandlunchmenus.

Source:primark.com/en/homepage

LululemonLululemon’sflagshipstoreopenedinJanuary2017andhostsNeatNutrition,ahealthnutrientcompanywhichprovidesproteinshakesandcoffee.AsLululemonrunsfitnessclassesfromitsin-storestudio,thebarisparticularlypopularforcustomersattendingthese,accordingtooneretailassistantwespoketo.

Primark,OxfordStreetandlululemon,RegentStreetSource:FungGlobalRetail&Technology

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DeborahWeinswig,ManagingDirector,FungGlobalRetail&Technologydeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

April6,2017

July14,2017

TopshopWevisitedtheflagshipstoresforfashionchainTopshop,valueapparelretailerPrimarkandathleisurebrandlululemontoseewhatfoodserviceapparelretailersareoffering.Eachoftheseretailerschosetofeatureexternalbrandsthatalignwiththeirownbrandimageandvalues.

Topshop’slargeststoreinLondon,onOxfordStreet,offersthreetypesoffoodservice;aBenugocafé(previouslyEat),aBubbleologybarandaLola’scupcakesstand.Theseon-trend,highlysocial-mediashareablebrandshelppromotetheTopshopbrandandcustomerengagement.StaffworkinghereevenhaveuniformspartneredwithTopshopwhichchangeeveryseason,accordingtoTheCaterer.BubbleologyandLola’swerebusywhenwevisited,andtheBenugocaféwaslessbusy,withafewpeopleworkingonlaptopsasitoffersfreeWi-Fi.

Topshop,OxfordStreetSource:FungGlobalRetail&Technology

Topshop’slargeststoreinLondon,onOxfordStreet,offersthreetypesoffoodservice.

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DeborahWeinswig,ManagingDirector,FungGlobalRetail&Technologydeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

April6,2017

July14,2017

DepartmentStoresDepartmentstorestendtogoaboveandbeyondwiththechoicetheyofferinfoodservice.WevisitedtheflagshipstoresofDebenhams,JohnLewisandSelfridges,alllocatedonOxfordStreet.

DebenhamsDebenhamsoffersnotonlyapermanentrestaurantandacafé,butaChikitchenandaPatisserieValerie.Byofferingpermanentfoodservicesandtemporarypartnerships,Debenhamscankeepupwithnewfoodtrendsandaddseasonalinterest.

Source:debenhams.com/en-hk

HollandandBarrettHollandandBarrettistheUK’sleadinghealthfoodretailer.Itsfoodserviceofferingpromotestheupsellingofitsownproductsthroughofferinga“FuelontheMove”concept:customerscanmakeproteinshakesforon-the-goorchoosefromapick-and-mixofferingofdriedfruitandnuts.

HollandandBarrett,OxfordStreetSource:FungGlobalRetail&Technology

Foodstoresusefoodservicetoupselltheirproductsandincreaseawarenessofnewproducts.

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DeborahWeinswig,ManagingDirector,FungGlobalRetail&Technologydeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

April6,2017

July14,2017

JohnLewisJohnLewisoffersfivein-storerestaurants—Benugocafé,Rossopomodoropizzeria,burgerrestaurantHamHolyBurger,LebanesecanteenComptoirLibanaisandThePlaceToEat,whichisJohnLewis’sownrestaurant—withafurthersushiandwinebarlocatedinitsFoodhall.

Debenhams,OxfordStreetSource:FungGlobalRetail&Technology

SelfridgesSelfridgesoffersevengreaterchoice.Thereisatleastoneplacetositandeatonalmosteveryfloorofthedepartmentstore,asitboastsanimpressive16restaurantsintheOxfordStreetstore.Moreover,Selfridgesanditsrenownedfoodhallofferedextrachoicewithfoodstallsanddelicatessens.Eachsummer,SelfridgesalsoopensitsrooftoprestaurantasanexperientialdiningexperiencewithviewsacrossLondon.

Selfridges,OxfordStreetSource:FungGlobalRetail&Technology

Departmentstoreshavethewidestarrayoffoodservice,withSelfridgesoffering16placestositandeat.

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DeborahWeinswig,ManagingDirector,FungGlobalRetail&Technologydeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

April6,2017

July14,2017

FoodandGroceryStoresItisnothingnewforgrocerysuperstorestoofferin-storecafésoron-the-gomealdeals.However,weobservethatfoodstoresareusingnewtypesoffoodservicetoupselltheirinstoreproducts.WevisitedHollandandBarrettonOxfordStreetandWaitroseatKing’sCross.

WaitroseTheKing’sCrossWaitrosestoreisoneoftheretailer’slargestbranchesinCentralLondon.Itoffersajuicebar,bakery,winebarandterraceoverlookingthenearbycanal.Notonlydothesefeaturesencouragedwelltime,butthesupermarketusesthesefeaturestopromotenewofferingsandallowcustomersto“trybeforebuy.”Thestorealsooffersacookingschoolforcustomerstobookinatlunchtimeorafterworkhours.

Waitrose,King’sCrossSource:FungGlobalRetail&Technology

KeyTakeaways• Asbrick-and-mortarretailbecomesmorefocusedonthequalityof

theexperience,retailersarerampinguptheirfoodserviceofferings.

• Departmentstoreshavelongofferedcafésandrestaurants,buttheyareofferingmorechoicethanever,withnicheortemporaryfoodserviceofferingsaddinginterestin-store.

• Moreapparelspecialistretailersarehostingfoodandbeveragesoutletsintheirstores,withevenvalueretailerPrimarklaunchingin-storecafés.

• Grocerysuperstoresareinnovating,too,withwinebarsandsushibars.

ReadersmayalsobeinterestedinourMay2016reportFoodService&Shopping.

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DeborahWeinswig,ManagingDirector,FungGlobalRetail&Technologydeborahweinswig@fung1937.comUS:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.

April6,2017

July14,2017

DeborahWeinswig,CPAManagingDirectorFungGlobalRetail&TechnologyNewYork:917.655.6790HongKong:852.6119.1779China:86.186.1420.3016deborahweinswig@fung1937.comKatieMarshallResearch&MarketingAssistantHongKong:8thFloor,LiFungTower888CheungShaWanRoad,KowloonHongKongTel:85223004406London:242-246MaryleboneRoadLondon,NW16JQUnitedKingdomTel:44(0)2076168988NewYork:1359Broadway,18thFloorNewYork,NY10018Tel:6468397017

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